market segmentation in marketing

1. Market Segmentation
R . Avinash

2. Definition of market segmentation:-
Market segmentation is the process of dividing a broad
consumer or business market, normally consisting of existing and
potential customers, into sub-groups of consumers (known
as segments) based on some type of shared characteristics. In
dividing or segmenting markets, researchers typically look for
common characteristics such as shared needs, common interests,
similar lifestyles or even similar demographic profiles. The
overall aim of segmentation is to identify high yield segments –
that is, those segments that are likely to be the most profitable or
that have growth potential – so that these can be selected for
special attention (i.e. become target markets).

4. Geographic segmentation:-
The geo-cluster approach (also called geodemographic segmentation) combines
demographic data with geographic data to create richer, more detailed
profiles. Geo-cluster approaches are a consumer classification system designed
market segmentation and consumer profiling purposes. They classify residential
regions or postcodes on the basis of census and lifestyle characteristics obtained
from a wide range of sources. This allows the segmentation of a population into
smaller groups defined by individual characteristics such as demographic,
socio-economic or other shared socio-demographic characteristics.
Demographic segmentation:-
Segmentation according to demography is based on consumer- demographic variables
such as age, income, family size, socio-economic status, etc. Demographic segmentation
assumes that consumers with similar demographic profiles will exhibit similar purchasing
patterns, motivations, interests and lifestyles and that these characteristics will translate
into similar product/brand preferences. In practice, demographic segmentation can
potentially employ any variable that is used by the nation's census collectors.

5. Psychographic segmentation:-
Psychographic segmentation, which is sometimes called psychometric
or lifestyle segmentation, is measured by studying the activities, interests, and opinions (AIOs)
of customers. It considers how people spend their leisure, and which external influences they
are most responsive to and influenced by. Psychographics is a very widely used basis for
segmentation, because it enables marketers to identify tightly defined market segments and
better understand consumer motivations for product or brand choice.
Behavioral segmentation:-
Behavioral segmentation divides consumers into groups according to their observed
behaviors. Many marketers believe that behavioral variables are superior to demographics
and geographics for building market segments[ and some analysts have suggested that
behavioural segmentation is killing off demographics.